United States District Court, N.D. Indiana, South Bend Division
IN RE FEDEX GROUND PACKAGE SYSTEM, INC. EMPLOYMENT PRACTICES LITIGATION MDL 1700
FedEx Ground Package Systems, Inc. This Document Relates to Tofaute ET AL.
OPINION AND ORDER
L. Miller, Jr. Judge
recently approved the final settlement agreements in this
class action and eighteen others, all consolidated in an MDL
that's now twelve years old, all resolving claims related
to whether FedEx Ground truck drivers were employees or
independent contractors. I also granted in part the class
counsel's fee requests in each. Counsel for the objecting
class representatives in Tofaute, the New Jersey
class action, now ask for fees and costs. Fed.R.Civ.P. 23(h).
named plaintiffs in a typical class action are mere
“pawns” or “paws” of the class
lawyers, Mars Steel Corp. v. Cont'l Ill. Nat'l
Bank & Trust Co., 834 F.2d 677, 681 (7th Cir. 1987);
In re Trans Union Corp. Privacy Litig., 629 F.3d
741, 744 (7th Cir. 2011), then this class action is far from
typical. After I granted preliminary approval of the New
Jersey action's settlement agreement, the seven class
representatives retained counsel to fight against final
approval and class counsel's fee petition.
opinion starts with an overview of the class
representatives' litigation leading up to my order
approving the settlement agreement and granting in part the
class counsel's fee request. An overview of the history
of the class action and this MDL can be found in that order.
[Doc. No. 257]; Tofaute v. FedEx Ground Package Sys.,
Inc., No. 3:05-cv-595, 2017 WL 1716276, at *1-4 (N.D.
Ind. Apr. 28, 2017).
preliminary approval of the settlement agreement between
class counsel and FedEx Ground, all seven class
representatives retained Nagel Rice LLP and DiSabato &
Bouckenooghe LLC to object to the fairness of the agreement.
The grounds for their objections were that class counsel
undervalued the drivers' claims under the New Jersey
Consumer Fraud Act, N.J. Stat. Ann. §§ 56:8-1
et seq., when it settled those claims for nothing,
and under the remaining claims when class counsel settled
them for about 55 percent of class counsel's estimate of
their potential value.
hearings on the settlement agreements resolving all twenty
cases in the MDL were scheduled for January 23 and 24, 2017.
The court was to hold a meeting on January 17 to discuss the
format for the upcoming fairness hearings. Before the January
17 meeting, the class representatives found an error in the
notice to class members as to the average amount of recovery
under the settlement agreement and as to whether the class
representatives approved the settlement. They asked that new
notice be issued showing the corrected average recovery
amount and explaining that the class representatives
don't approve of the settlement. They also asked that the
fairness hearings be adjourned.
class representatives then asked to be allowed to appear at
the upcoming organizational meeting, which I granted. They
reiterated the problems with notice and also indicated that
they intend to challenge the underlying validity of a
settlement agreement that isn't approved by any of the
class representatives. For reasons unrelated to the notice
issue, I decided that the fairness hearings would need to be
postponed. At the request of class counsel and FedEx Ground,
I rescheduled the hearings for March 13 and 14, 2017. Given
the additional time before the fairness hearings, the class
representatives sent another request to the court to order a
ruling on the class representatives' re-notice requests,
class counsel and FedEx Ground stipulated that they would
re-notice the class. Their proposed notice said that this
notice was amended to correct certain errors, which would
appear in boldface throughout the notice. It updated the
fairness hearing date, the average settlement figure, and
sentences about who supported the agreement to say that the
class representatives didn't support it. It also included
an extended objection deadline.
counsel and FedEx Ground said they didn't believe the
errors in the first notice were material, but that they were
willing to re-notice the class out of “an abundance of
caution, ” and “to eliminate any possible doubt
as to whether the Class had sufficient information.”
The class representatives asked for the new notice to mention
several more times that the class representatives don't
agree with the settlement and that they've hired their
own counsel to pursue their objections. I found the
stipulated re-notice to be sufficient and the class
representatives' proposed additions to be overkill that
could confuse more than educate. I ordered the re-notice
according to the stipulation, extended the objection
deadline, and gave the class representatives time to argue
about the validity of a settlement agreement that all class
representatives oppose. [MDL Doc. No. 2979]. About a week
later, the class representatives filed a letter saying that
the class action website still contained the old and
inaccurate information from the initial notice. Class counsel
promptly updated the website.
the class representatives submitted a brief explaining that
they had asked class counsel for documents relating to the
mediation and for the opportunity to depose class counsel,
but that class counsel never responded. They argued that
class counsel, as the class representatives' lawyers
until the class representatives obtained outside counsel,
must give the class representatives access to their file.
They also sought discovery. They then sent another letter to
the court requesting discovery to aid their argument that the
parties never reached a valid settlement.
time, it became known to class counsel that the class
representatives were organizing an objection campaign amongst
the class members. The class representatives sent out letters
to class members explaining the error in the initial notice
and that they believe the case to be worth more than the
amount for which it was settled. Attached to the letters were
forms the recipients could fill out and send back to the
court to register their objections. The forms said that the
signatory objects to an average settlement amount that's
lower than originally noticed, and that if the class
representatives don't agree with the settlement, the
signatory won't agree either.
counsel asked me to issue a corrective notice to class
members who might have received the communication, to enjoin
the class representatives from circulating the form, and to
order the class representatives to show cause why they
shouldn't have to pay for the corrective notice. I held
that the class representatives have the right to drum up
objections from their peers as long as they don't
misinform them, and so I denied class counsel's request.
[MDL Doc. No. 3001].
awaiting my opinion on the emergency injunction, the class
representatives filed their brief addressing the facial
validity of the settlement agreement. They argued that during
settlement negotiations, class counsel didn't discuss a
proposed settlement with the class representatives that
involved fee-shifting. They argued that this failure,
combined with the class representatives' unanimous
opposition and class counsel's alleged undervaluing of
the claims, makes the settlement invalid on its face. I
rejected these arguments. Even though the class
representatives' opposition and class counsel's
settling one of the claims for nothing raise red flags for
fairness review, see Eubank v. Pella Corp., 753 F.3d
718, 721 (7th Cir. 2014), none of these is sufficient to
knock out a settlement agreement before fairness review. I
also denied the class ...